OVERVIEW OF SUPER CHANGES
- Spouse tax offset
- Personal superannuation contributions deduction
- Low income superannuation tax offset
- Introducing a transfer balance cap of $1.6M for pension phase accounts
- Reduction of Division 293 income threshold to $250,000
- Reduction of non-concessional (post-tax) contributions cap to $100,000 per annum
- Reduction of concessional (pre-tax) contributions cap to $25,000 per annum
- Carry-forward concessional contributions of unused caps over five years
- Improve the integrity of retirement income streams
- Removal of anti-detriment payment
- Innovative retirement income stream products
SPOUSE TAX OFFSET
Currently a member can claim a tax offset up to a maximum of $540 for contributions they make to their spouse's eligible super fund if, among other things, the total of the spouse's assessable income, total reportable fringe benefits and reportable employer super contributions is under $13,800.
From 1 July 2017, the spouse's income threshold will be increased to $40,000. The current 18% tax offset of up to $540 will remain as is and will be available for any member, whether married or de facto, contributing to a recipient spouse whose income is up to $37,000. As is currently the case, the offset is gradually reduced for income above this level and completely phases out at income above $40,000. 
Members will not be entitled to the tax offset when the spouse receiving the contribution has exceeded their non-concessional contributions cap for the relevant year, or has a total superannuation balance equal to or exceeding the transfer balance cap immediately before the start of the financial year in which the contribution was made.
Summary impacts for self-managed super funds
- Possible increase in spouse contributions.
PERSONAL SUPER CONTRIBUTIONS DEDUCTION
Currently, a member (primarily self-employed) can claim a deduction for personal super contributions where they meet certain conditions. One of these conditions is that less than 10% of their income is from salary and wages. From 1 July 2017, this condition will be removed. The remaining conditions remain the same.
Summary impacts for self-managed super funds
- Notices of intent could be received and will lead to acknowledgements needing to be issued.
- There will be changes to member eligibility, for example a defined benefit.
- Additional reporting may be required.
- Due to more eligible contributions, funds may see an increase in their assessable income.
LOW INCOME SUPER TAX OFFSET CONTRIBUTION
The government will introduce a Low Income Superannuation Tax Offset (LISTO), which will replace the Low Income Superannuation Contribution (LISC) policy that has been repealed from 1 July 2017.
From 1 July 2017, eligible members with an adjusted taxable income up to $37,000 will receive a LISTO contribution to their super fund. The LISTO contribution will be equal to 15% of their total concessional (pre-tax) super contributions for an income year, capped at $500.
INTRODUCING A TRANSFER BALANCE CAP OF $1.6 MILLION FOR PENSION PHASE ACCOUNTS
From 1 July 2017, the government will introduce a $1.6 million cap on the total amount that can be transferred into the tax-free retirement phase for account-based pensions. 
To provide a broadly equivalent outcome for people over 60 years old, this will also mean a change to the taxation of:
- lifetime pensions paid under subregulation 1.06(2) and annuities paid under subregulation 1.05(2) of the SISR
- current life expectancy pensions paid under subregulation 1.06(7) and annuities paid under subregulation 1.05(9) of the SISR
- current market-linked pensions paid under subregulation 1.06(8) and annuities paid under subregulation 1.05(10) of the SISR.
These pensions are commonly provided by defined benefit funds, but may be provided by other funds, including self-managed super funds (SMSFs).
The general transfer balance cap will be indexed in $100,000 increments in line with CPI. Indexation will be applied proportionally where a member is a retirement phase income stream recipient, but has not at any time met or exceeded their cap.
Summary of impacts for self-managed super funds before 1 July 2017
- You will need to help your members understand the likely value of their current or impending pensions as at 30 June 2017 and be ready to assist them to reduce the value of these pensions if necessary.
- If your members do commute their current pensions and you have assets to move back to accumulation phase, decide if you will apply CGT relief.
- You will need to determine if you are currently paying any of the lifetime, market linked or life expectancy pensions detailed above.
Summary of impacts for self-managed super funds after 1 July 2017
- There will be new obligations to report information to us when your members start or commute retirement phase income streams.
- If you are paying a lifetime pension or are continuing to pay a market linked and life expectancy pension that started before 1 July 2017, you will have new withholding obligations if the member is over 60 years old.
- If the ATO issue you with a commutation authority to reduce the value of a member's retirement phase income stream, you will have 60 days to comply. If you do not comply with the commutation authority you will not be able to claim exempt current pension income (ECPI) in relation to the income stream. You also have an obligation to comply with the commutation authority under superannuation law.
REDUCTION OF DIVISION 293 INCOME THRESHOLD TO $250,000
Currently members with income and concessional super contributions in excess of $300,000 will trigger a Division 293 assessment. From 1 July 2017, the government will lower the Division 293 income threshold to $250,000. A member with income and concessional super contributions, exceeding the $250,000 threshold will have an additional 15% tax imposed on the amount over the threshold up to the total amount of concessional contributions not exceeding their concessional contributions cap.
Summary of impacts for self-managed super funds 
- From 1 July 2018, release authorities will now come only from the ATO and must be returned to the ATO along with the payment. This means you will need to send monies to the ATO.
- Release authorities will remain paper-based.
- The end benefit cap, for deferred debt accounts, is calculated only when prescribed by law.
LOWERING THE NON-CONCESSIONAL (POST-TAX) CONTRIBUTIONS CAP TO $100,000 PER ANNUM
From 1 July 2017, the government will lower the annual non-concessional (after tax) contribution cap from $180,000 to $100,000 per year. This will remain available to members between 65 and 74 years old if they meet the work test. The cap will be indexed in line with the concessional contributions caps.
Members with a total superannuation balance greater than or equal to the general transfer balance cap ($1.6 million for the 2017-18 financial year) at the end of 30 June of the previous financial year, and makes non-concessional contributions, will have excess non-concessional contributions.
If you are under 65, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps. This is known as the ‘bring forward’ arrangement.
From 1 July 2017, the non-concessional contributions cap amount that you can bring forward and whether you have a two or three year bring forward period will depend on your total superannuation balance. Your total superannuation balance is determined at the end of 30 June of the previous financial year in which the contributions that triggered the bring-forward, were made.
For 2017-2018 onwards to access the non-concessional bring forward arrangement:
- the individual must be under 65 years of age for one day during the triggering year (the first year)
- they must contribute more than the annual cap ($100,000 for the 2017-2018 financial year)
- the difference between the general transfer balance cap ($1.6 million for the 2017-2018 financial year) and their total superannuation balance must be greater than the general non-concessional contributions cap ($100,000 for the 2017-2018 financial year) at the end of 30 June of the previous financial year – for the 2017-2018 financial year this means that they must have a total superannuation balance less than $1.5 million to be able to access the bring forward arrangement.
- For 2017-2018 onwards the remaining cap amount for years two or three of a bring forward arrangement is reduced to nil for a financial year if their total superannuation balance is greater than or equal to the general transfer balance cap at the end of 30 June of the previous financial year.
REDUCTION OF CONCESSIONAL (PRE-TAX) CONTRIBUTIONS CAP TO $25,000 PER ANNUM
Currently, members can make concessional (pre-tax) contributions up to $30,000 ($35,000 for people 50 years old and over) within a financial year. From 1 July 2017, the government will lower the annual concessional contributions cap to $25,000 for all members. The cap will index in line with wages growth.
CARRY-FORWARD CONCESSIONAL CONTRIBUTIONS OF UNUSED CAPS OVER FIVE YEARS
From 1 July 2018, members will be able to make 'carry-forward' concessional super contributions if they have a total superannuation balance of less than $500,000. They will be able to access their unused concessional contributions cap space on a rolling basis for five years. Amounts carried forward that have not been used after five years will expire. The first year in which you can access unused concessional contributions is the 2019–2020 financial year.
Summary of impacts for self-managed super funds
- Release authorities will remain paper-based.
- Funds will now send monies to us.
IMPROVING THE INTEGRITY OF RETIREMENT INCOME STREAMS
Transition to retirement income streams (TRIS) are currently available to assist members to gradually move to retirement by accessing a limited amount of super. Currently, where a member receives a TRIS, the fund receives tax-free earnings on the super assets that support it. 
From 1 July 2017, the government will remove the tax-exempt status of earnings from assets that support a TRIS. Earnings from assets supporting a TRIS will be taxed at 15% regardless of the date the TRIS commenced. Members will also no longer be able to treat super income stream payments as lump sums for taxation purposes.
Summary of impacts for self-managed super funds
- Funds can no longer claim exempt current pension income (ECPI) from assets supporting a TRIS.
- You will need to include income from assets supporting a TRIS, in assessable income.
- A TRIS will need to be commuted and a new income stream commenced, to be entitled to ECPI.
- There will be related accounting and reporting changes.
- There is the potential for movement of assets to be able to comply.
REMOVAL OF ANTI-DETRIMENT PAYMENT
Currently, the anti-detriment provision enables a fund to claim a deduction in their tax return for a top-up payment made as part of a death benefit payment where the beneficiary is the dependant of the person. The top-up amount represents a refund of a member's lifetime super contribution tax payments into an estate.
From 1 July 2017, the government is removing this provision and super funds will no longer be able to claim this deduction. This change will ensure consistent treatment of lump sum death benefits across all super funds.
Super funds may claim a deduction for an anti-detriment payment as part of a death benefit if a fund member dies on or before 30 June 2017. The fund has until 30 June 2019 to pay the benefit. Funds cannot include anti-detriment payments as part of a death benefit if the member dies on or after 1 July 2017.
Summary of impacts for self-managed super funds
- Funds cannot claim a deduction if members die on or after 1 July 2017.
- If a member dies on or before 30 June 2017, the anti-detriment payment must be made before 30 June 2019 to be eligible for the deduction.
INNOVATIVE RETIREMENT INCOME STREAM PRODUCTS
Currently there are rules restricting the development of new retirement income products. From 1 July 2017, the government will remove these barriers by extending the tax exemption on earnings in the retirement phase to products such as deferred lifetime annuities and group self-annuitisation products.
Summary of impacts for self-managed super funds
- There will be a potential increase in members investing in deferred lifetime annuity products.
- The value of these products at the time ECPI can be claimed will need to be reported for the transfer balance cap.